My personal blog about international trade, public policy & politics, pop culture, and stuff that probably interests only me

Thursday, August 23, 2012

Another Year, Another Bogus China Study

So the union-friendly folks over at the Economic Policy Institute have released their annual report "calculating" the number US jobs lost because of trade with China. This year's EPI report is pretty much identical to past editions: same (erroneous) methodology, same (erroneous) doom-and-gloom protectionist conclusions. I really shouldn't give the "study" an iota of bandwith, but because it will undoubtedly be mentioned by ignorant journalists or opportunistic politicians looking to respectively score a few cheap pageviews or scare a few unwitting voters, here's all you need to read:

Today's quick dismissal of the EPI report by the US-China Business Council.

Finally, one quick observation: I just love this chart in EPI's new study entitled "Cumulative U.S. jobs displaced by growing trade deficits with China since 2001":

If you look closely, you'll see that EPI's report shows "cumulative US job losses" supposedly caused by US-China trade plummeting in 2009 - thus indicating a major "gain" of about 300,000 China trade-related jobs in America between 2008 and 2009. This big "victory," of course, is due to the fact that the China-US trade deficit plummeted in 2009 because of the Great Recession, and, as noted above, EPI's "jobs" calculation is wholly dependent on the trade deficit.

Unemployment shot up in 2009 from 7.7 percent in January to 10.1 percent in October before settling at 10 percent in December. Behind those percentages were more than 4.1 million people who lost their jobs during the year. According to data from the Bureau of Labor Statistics, that's the most job losses in a year since 1940.

Funny, I can't seem to find a 2010 version of EPI's annual paper that highlights the impressive 2009 "improvement" in their US jobs picture. How weird. (You can check the BLS numbers - non-farm payrolls and unemployment rate - here, if you really want. Heck, it'd be a lot more informative than reading the EPI study.)

So can someone at EPI - or in the office of, say, Senator Schumer - please call or email me to reconcile the Institute's amazing "improvement" in US-China trade-related jobs in 2009 with the depressing collapse in total non-farm jobs (and the soaring US unemployment rate) shown in the official US employment data? I hereby promise that I will post any explanation in full on my little ol' blog.

Yeah, I'm not holding my breath waiting for the phone to ring on that one.

Anyway, over the next few months, we will undoubtedly be deluged with protectionist rhetoric - from both political parties, unfortunately - about the pernicious effects of the US-China trading relationship on the American job market, and, if history is any guide, EPI's study promises to play a supporting role in such demagoguery. But the next time you hear some campaigning politician breathlessly claim that Chinese imports are destroying millions of American jobs, be sure to remember the chart above, and that said politician is either stunningly ignorant or willfully trying to scare and deceive you.